One item on the agenda: Could the issuance of “green bonds” be part of the answer?

Investor interest for green bonds exists, but potential purchasers of such products are not being offered appropriate investments on a big enough scale.

Ben Caldecott, head of policy at investment manager and adviser Climate Change Capital, said that investors such as pension funds and insurers are interested long-term green bonds to match their existing liabilities.

He said:

“Green bond issuance is primarily from development banks such as the European Bank for Reconstruction and Development but I think this will become a relatively small part of the market as it matures.

“Utilities and banks, which need to deleverage their balance sheets, could securitize their renewable energy loans and issue asset-backed securities.”
Last month, the Climate Bonds Initiative issued a discussion paper advocating the creation of green-covered bonds.

The idea is that an issuer, typically a bank, could issue a “covered” bond that is secured upon a pool of renewable energy loans, perhaps loans to wind farms or solar panel manufacturers.